Fireman's Fund Ins. Co. v. Great Am. Ins. Co. of N.Y.
Citation | 822 F.3d 620 |
Decision Date | 20 May 2016 |
Docket Number | No. 14–1346–cvL.,14–1346–cvL. |
Parties | FIREMAN'S FUND INSURANCE COMPANY, One Beacon Insurance Company, National Liability and Fire Insurance Company, QBE Marine & Energy Syndicate 1036, Plaintiffs–Counterclaim–Defendants–Appellants, v. GREAT AMERICAN INSURANCE COMPANY OF NEW YORK, Defendant–Crossclaim–Defendant–Counter–Claimant–Appellee, Max Specialty Insurance Company, Defendant–Crossclaim–Defendant–Counter–Claimant–Appellee, v. Signal International, LLC, Defendant–Crossclaim–Defendant–Cross–Claimant. |
Court | United States Courts of Appeals. United States Court of Appeals (2nd Circuit) |
John A.V. Nicoletti (Robert A. Novak, William M. Fennell, on the brief), Nicoletti Hornig & Sweeney, New York, NY, for Plaintiffs–Appellants.
George R. Zacharkow (Stephen J. Galati, Christian T. Johnson, on the brief), Mattioni, Ltd., Philadelphia, PA, for Defendant–Appellee Great American Insurance Company of New York.
Stephen D. Straus, Traub Lieberman Straus & Shrewsberry LLP, Hawthorne, NY, for Defendant–Appellee Max Specialty Insurance Company.
Before: CABRANES, POOLER, and DRONEY, Circuit Judges.
DRONEY
, Circuit Judge:
Plaintiffs–Appellants are Fireman's Fund Insurance Company, One Beacon Insurance Company, National Liability and Fire Insurance Company, and QBE Marine & Energy Syndicate 1036 (collectively “Fireman's Fund”), insurance companies that provided marine general liability and marine excess liability policies to Defendant–Appellant Signal International, LLC (“Signal”).1 Fireman's Fund and Signal appealed from a judgment of the United States District Court for the Southern District of New York (Oetken, J. ), granting summary judgment to Defendants–Appellees Great American Insurance Company of New York (“Great American”) and Max Specialty Insurance Company (“MSI”).
Fireman's Fund, Great American, and MSI issued insurance policies that provided various coverages for a dry dock in Port Arthur, Texas owned by Signal. After the dry dock sank in 2009, Signal and Fireman's Fund sought contributions from Great American and MSI for the loss of the dry dock and resulting environmental cleanup costs. The district court ruled in adjudicating a number of summary judgment motions that the Great American and MSI policies were void in light of Signal's failure to disclose when it applied for those policies that the dry dock had significantly deteriorated and that repairs recommended by a number of consultants and engineers over several years had not been made.
After submission of this appeal, MSI and Signal reached a settlement and obtained a dismissal of the case between them. Therefore, Signal no longer appeals the grant of summary judgment to MSI. Nonetheless, Fireman's Fund asserts that it may still pursue appeal of the issues relating to the policy issued to Signal by MSI based on our decision in Maryland Cas. Co. v. W.R. Grace & Co. See 218 F.3d 204, 211 (2d Cir.2000)
() . Fireman's Fund was granted summary judgment below against MSI on a contribution claim based on MSI's policy, and we assume without deciding that Fireman's Fund is correct that it may pursue this appeal of the district court's decision finding the MSI policy void, based on Fireman's Fund's interest in the unappealed summary judgment decision on contribution.
We agree with the district court's orders. We hold that the Great American policy was a marine insurance contract subject to the doctrine of uberrimae fidei and that Signal's nondisclosure violated its duty under that doctrine, permitting Great American to void the policy. We further hold that MSI's policy was governed by Mississippi law; that, under that law, Signal materially misrepresented the dry dock's condition; and that MSI was entitled to void the policy on that basis. Accordingly, we AFFIRM.
Signal is a marine construction firm involved principally in building and repairing ocean-going structures such as offshore drilling rigs, platforms, and barges. In 2003, Signal purchased six facilities—two in Mississippi and four in Texas—for use in its business of repairing, upgrading, and converting offshore drilling rigs.2 One of the Texas facilities was a dockyard in Port Arthur, Texas. In acquiring that facility, Signal assumed an existing lease of a dry dock (“the dry dock”) located along the Sabine–Neches Waterway near the Gulf of Mexico.3 The dry dock was built in 1944 at the direction of the United States Navy to repair Navy ships. In early 2005, Signal accepted an offer from the lessor to purchase the dry dock, which Signal had been using in its operations since it assumed the lease.
Throughout its lease and ownership of the dry dock, Signal received a number of reports on the dry dock's deteriorated condition. These included the following:
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